If the Keystone XL Pipeline gets permitted and built, prices of Wyoming crude would likely rise, a Washington, D.C.-based research analyst said.

That’s because additional pipeline capacity would free up the crude pipelines in Wyoming to haul local oil, said Trisha Curtis, the director of upstream and midstream research for the Energy Policy Research Foundation Inc. The organization studies energy economics and policy issues with emphasis on oil, natural gas and petroleum markets.

Curtis spoke last week in Casper at a meeting of the Wyoming Pipeline Authority, which promotes development of pipelines to enhance natural resource development in Wyoming.

The proposed 1,179-mile Keystone XL Pipeline would snake through the middle of the United States – the closest it ever gets to Wyoming is in South Dakota and Nebraska – to transport crude from Alberta, Canada, to the Gulf of Mexico. It has faced numerous regulatory hangups, Curtis said, and recently the five-year anniversary of not being permitted.

Wyoming has crude. It also has pipelines that haul crude from Wyoming and elsewhere, including from Canada, Curtis said.

But the pipelines that move crude from Wyoming are fully loaded, with 20-year contracts. If Wyoming producers increase production, it would be a challenge to find pipelines with capacity to move it, Curtis said.

The environment is called “constrained pipelines,” Curtis said. It’s one of the reasons Wyoming crude is sold to refineries at a discount — which the refineries don’t necessarily pass on to consumers.

Discounted prices result in lower revenue for the state, she said. They also result in lower profit margins for companies, which fall even more when there is a drop in world oil prices. Slim margins could evaporate and investment in Wyoming could halt, Curtis said.

“Right now, you have a system that has no optionality,” she said. “When you have another pipeline built, basically you’re giving another option for crude oil. So it allows more crude oil to flow through Wyoming pipelines.”

Although Keystone offers hope to Wyoming oil prices, Curtis has little hope for Keystone being approved. The government delayed key dates for when it was to review permits. Even if the pipeline gets approved, there will be lawsuits to stop it, Curtis said.

“I’m pretty pessimistic on it right now,” she said.

Reach state reporter Laura Hancock at 307-266-0581 or at laura.hancock@trib.com. Follow her on Twitter: @laurahancock.

(8) comments

hellowyo

Maybe one positive aspect of this pipeline I had not seen before. Otherwise I really dont see how this pipeline benefits us much. It transports oil from Canada to the Gulf of Mexico. Is it worth the benefit of a few construction jobs building it?

ChesterIII

This pipeline will hurt us in the long run by raising the prices of refined products. The unspoken reason for moving the crude from Canada and and North Dakota to the Gulf of Mexico is to make it possible to load North American crude onto tankers and ship it to Asia where it is worth far more money. When that starts happening, we can expect to see fuel prices increase in the U.S. The promoters of the Keystone XL have their own wallets in mind, not yours.

Kool Kat

I don't know how many "full time jobs" the keystone project would make as verses the part time jobs created without it? But I'm sure most folks would prefer full time - high paying jobs over lower paying part time jobs. Personally, I'd rather see full-time high paying jobs as verses part-time low to medium paying jobs for my friends and family members.

hellowyo

OH I agree, I am in the welding industry, I know the construction jobs would be great. I just dont know if there are many other benefits beyond that. I am not for or against this project, just looking to get past the spin and weigh the options.

Kool Kat

Vision is one of the perceptional vices entrepreneurs have, when it comes to planning and opportunity. As it stands right now, Wyoming has many pipe line connections to states several states away.
To the visionary, the Keystone XL Pipeline needs an "on ramp" for Wyoming crude oil, as well. And since Casper has a newly developing "transloading facility" being built and designed.
It would be incumbent on Wyoming to offer crude oil via a transloaded rail o this pipeline as verses over interstate travel. It would also be incumbent on energy companies within Wyoming to commerce Wyoming pumped crude oil through a "new pipeline or pipe lines" to the XL project.
Yes, the options are there, the question of visionaries filling those voids are what are missing thus far. I believe Wyoming Energy Business is loaded with entrepreneurial visionaries that can actually produce to make those jobs, using the Keystone XL.

No spin, just opportunity knocking, is all.

Cody Coyote

Never ever forget that Petronomics is voodoo.

In the case of KeystoneXL, there is little in it for Wyoming regardless of the spin presented here, and any alleged benefits to the US-at-large are hyped, if not downright specious.

The better question might be: Why did we close all the oil refineries rather than modernize them ? How many refineries went away , just in Wyoming ?

hellowyo

That is what I am worried about, I dont see a lot of benefits to the US in general beyond some construction jobs. Is it going to help our oil supply and lower prices? I doubt it, as it seems like the oil companies will see that it doesnt.

Jackalope

Somewhere in the past, there was a guarantee of financing a major pipeline to transport Wyoming natural gas to Missouri, with the certainty that this would increase revenue for both producers and the state. Pipeline was constructed; Wyoming gas is still selling for low prices; tax revenue has never met expectations. Are we completely immune to the lessons of history?

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